Thursday, December 3, 2009

Canadian Uranium News 12/02/09

Debut issue of a new monthly column

pitchblende This is a new monthly column for this blog. In addition to the Western Lands Uranium Gopher, which covers the industry in the U.S., I'm expanding blog coverage to include the Canadian uranium mining industry.

This column is an edited version of content published in Fuel Cycle Week, V8:N355 12/02/09 by International Nuclear Associates, Washington, DC.

(All prices are expressed in Canadian currency)
(Image source: Canadian Nuclear Association –
History of Uranium Mining in Canada)

CAMECO gains from India/Canada nuclear deal

Jerry_Grandy_CamecoUranium mining giant Cameco (TSX:CCO) CEO Jerry Grandey (left) told CBC news a cooperative agreement inked between Canada and India on Nov 28 is a multi-million payday for the firm. He said India is an "energy hungry country" with a plan for aggressively building new reactors. Indian political leaders have made the case for 20 GWe of new nuclear reactor construction over the next two decades.

Canadian Prime Minister Stephen Harper announced the deal jointly Nov 27 with Indian Prime Minister Manmohan Singh at a diplomatic meeting in Trinidad. According to information released by Harper's office, the agreement will allow Canadian firms to export nuclear fuel, technologies, and equipment to India. Harper told the National Post the agreement is worth $25-50 billion in exports over the next two decades.

Grandey estimated that the agreement could include combined exports to India, from all Canadian miners not just Cameco, of seven million pounds of uranium a year. At current long-term contract prices, the value of the exports would be about $500 million annually.

"One of the interesting things is that India has a very ambitious civilian nuclear energy power program and they have a shortage of uranium in that country. They've been quite eager to establish a long-term relationship with Cameco so we can supply them with fuel over many decades."

Canadian Trade Minister, Stockwell Day, said the state-owned Atomic Energy of Canada (AECL) had signed a memorandum of understanding with India for next-generation nuclear reactors. Canada ceased nuclear co-operation with India in 1974 after it used Canadian plutonium to build an atomic bomb. This new agreement restores the relationship. It includes supplying fuel to the reactors once they are built and operational.

Canada has no uranium enrichment capability and will need to produce nuclear fuel at an intermediate site in another country in order to power the ACR1000 reactor design, a 1,200 MWe unit. It is expected to be the primary reactor type offered for export to India.

The Canadian deal with India has created an uproar in Australia which has refused to sell uranium to India because it won't sign a nuclear nonproliferation treaty. Australian mining companies have complained they are losing market share to Canada.

The Rudd Administration said it is concerned India will stockpile domestic uranium for military weapons and use uranium imports for civilian purposes.

In Canada Minister Day said his country has insisted that India admit nuclear inspectors to civilian facilities. Under the deal, Canadian nuclear exports cannot be used for military purposes, he said.

Cameco updates Cigar Lake mine status

Dewatering of the Cigar Lake mine resumed in November at locations between 250-400 meters (800-1,400 ft) below the surface by placing inflatable seals between the sources of the water and the shafts. Miners are backfilling the seals with concrete. (See mine diagram ~ PDF file ~from Cameco web site.)

Mine managers said it will take six-to-twelve months to dewater the mine and resume operations depending on what shape the shafts and equipment are in once the water is gone. Regulatory agencies including the Canadian Nuclear Safety Commission and those from the provincial government in Saskatchewan must approve a new operations plan before production can resume.

Cameco CEO Jerry Grandy told the Toronto Globe & Mail Nov 27 the mine is expected to produce nine million pounds of uranium a year once it is again in production.

Hathor announces NI 43-101 results for Roughrider Zone

Hathor Exploration (CVE:HAT) announced a new discovery of high-grade uranium mineralization approximately 200 meters to the east of the Roughrider Zone on its 90% owned Midwest NorthEast property.

The initial report is 6.58 million pounds U3O8 in the indicated category, and 5.47 million pounds inferred. The higher grade zone is reported to be 17.28% U3O8. The results come from drilling 120 holes totaling 41,830 meters in 2008. Results from the 2009 summer drilling program are not included in the report. A 10% interest in the property is owned by Terra Ventures (TSX:TAS).

The NI 43-101 complaint report is being prepared by Scott Wilson Roscoe Postle Associates. The initial estimated NI 43-101 compliant indicated resource is 116,000 tonnes (6.5 million pounds) U3O8 grade 2.75% and an inferred resource of 83,000 tonnes (5.5 million pounds) U3O8 grade 3.00%.

UEX Corp reports progress in Shea Creek, Athabasca Basin

UEX Corp (TSE:UEX) reported drilling results from its 49% owned Shea Creek uranium project in the Athabasca Basin. It reported intercepts of 5.55% U3O8 in the site's Kianna deposit and 7.24% U3O8 in the site's Anne deposit.

UEX CEO said in a statement to Canadian news media Nov 21, "The significant drill results over such an extensive area illustrate the vast size and potential of this project."

UEX is a joint venture partner in the mine with Areva Resources Canada Inc.

The firm said in a statement the joint venture plans to spend $12.3 million in 2010 on the Shea Creek project and two others – Mirror River and Beatty River. Of that amount, $8 million is for exploration. UEX's share of the total is $5.4 million.

At market close Nov 27 UEX shares traded at $0.93 against a 52-week range of $0.49-$1.80 with market capitalization of $179 million. The firm reported $13.4 million in cash on hand.

CanAlaska gets $3 million investment, acquires Cluff Lake Uranium Project

Can Alaska Uranium Corp (TSX:CVV) has issued shares of stock against a private placement of $3 million to be used for uranium exploration.

The firm also announced the acquisition of the Cluff Lake project data and mineral claims located in the Western Athabasca Basin, from Hawk Uranium Inc. (TSX:HUI)

CanAlaska will purchase 100% of the project from Hawk for 1,250,000 shares and a cash payment of $62,500.

The Cluff Lake claims will be added to those of the existing Carswell project. These claims are situated immediately west of the past-producing uranium mine and processing facilities at Cluff Lake, which had produced 62 million pounds U3O8 over 22 years prior to its closure in 2000.

These claims are also located 11 km NW of the Shea Creek Project, an advanced-stage uranium exploration project presently being developed by UEX/AREVA in the same area.

New Nunavut group forms to oppose uranium mining

The Canadian Broadcasting Corp (CBC) reported Nov 25 that a new group of Nunavummiut concerned about uranium mining has been formed in response to advances in exploration in the Baker Lake region about 200 km inland from the Hudson Bay.

Sandra_InutiqSpokesperson Sandra Inutiq (right) said the group "would sponsor informed discussion" about whether uranium mining should be allowed in Nunavut.

She said the group's name translates from the native language as "Nunavummiut can rise up."

In 2007 Nunavut Tunngavik, Inc. the land claims organization for the region, approved a limited authorization for uranium mining. More than 20 companies are involved in exploration. Areva Canada has submitted a permit application for an underground mine at its Kiggavik site about 80 km west of Baker Lake.

Baker Lake resident Joan Scottie, who led opposition to uranium mining in the 1980s, participated in a press statement with the Nunavummiut group as did Jamie Kneen representing MiningWatch Canada.

Newfoundland deposits under exploration

Two firms are conducting initial exploration of possible uranium deposits on the Connaigre Peninsula on the southwest coast of Newfoundland. Altius Mineral (TSE:ALS) and Kirrin Resources (OTC:KIRRF) will commence a drilling program in 2010 once the weather permits.

Lawrence Winter, VP at Altius said the combined effort will cost in excess of $1 million. Results from just four drill holes in 2009 are the basis for planning the 2010 program. He added that a decision to develop a mine in the area is several years away. The work is taking place at Boxley Point near Hermitage Bay.

At market close Nov 27 Altius stock traded at $7.45 against a 52-week range of $3.58-8.27 with market capitalization of $211 million. No stock transactions were reported for Kirrin.

International Enexco to resume drilling at Mann Lake in Athabasca Basin

International Enexco Ltd (TSX:IEC) reported that drilling operations will resume in 2010 when weather permits at the firm's Mann Lake project in the eastern portion of the Athabasca Basin. The firm is in a joint venture with a 30% share. Other partners are Cameco (52.5%) and Areva Resources Canada (17.5%). The project is located 25 km southeast of Cameco's MacArthur River uranium mine.

Preliminary drilling results, according to a company press statement, are high grade intersections at two separate locations (7.12% U3O8) and (5.53% U3O8).

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Wednesday, December 2, 2009

Where’s the focus on AECL’s future?

A Canadian think tank says it knows - there isn’t one - at least for now

AECL SymbolAtomic Energy Canada Ltd. (AECL) has not had an easy time over the past several years. Despite record levels of financial support from the central government, it has managed to repeatedly disrupt North American medical isotope supplies with unplanned outages at the now 50-year old Chalk River reactor. Record cost over-runs at the Port Lepreau reactor refurbishment project have set the rest of the Canadian reactor world on edge.

Worse, AECL can’t even win a major contract at Darlington in its home province of Ontario that would have secured its place in domestic energy markets and set the basis for revived exports abroad.

The Centre for International Governance Innovation (CIGI), also located in Ontario, has given some deep thought to AECL’s future and issued a report on it in November. The think tank’s findings are very clear and unvarnished in their stark appraisal of what’s wrong and what needs to be done.

At the heart of the group’s finding is the issue of the “loss of domestic political consensus” about the need for and use of nuclear energy in Canada’s economy. The result is like the line from a song by folk singer Jeremy Fisher, “if you don’t stand for something, you’ll fall for anything.” Note the origin of this widely-cited proverb is in dispute.

Here are the additional key findings by CIGI.

  • The Ontario decision to delay indefinitely its plans for the construction of new nuclear reactors is emblematic of this loss and indicative of the obstacles confronting the Canadian nuclear industry;
  • Fragmented federal-provincial energy policy jurisdictions and political gamesmanship result in domestic market inertia effectively thwarting any prospects for a Canadian nuclear revival;
  • Without a revival in the domestic market for nuclear energy, AECL is unlikely to be successful marketing and selling reactors internationally;
  • Privatization of AECL will do little to improve the company's prospects and will mean the end of the CANDU reactor technology.

These observations are a useful condensation of what many observers have been saying for some time about AECL’s prospects for the future. The Darlington tender became a political football and the Harper government’s repeated statements about selling off part or all of AECL undermined public confidence in the organization. AECL has dim prospects for exporting its new ACR1000 reactor if it can’t convince anyone at home to buy it. Finally, selling off the crown corporation simply breaks up the firm. There is no upside from the sale for the company or its employees.

The report does not layout a clear agenda for AECL's future. The root cause of AECL's angst, lack of domestic political consensus, requires a firm response from the central government based on the principle that having a domestic source of carbon emission free power has strategic value in a world challenged by the threat of greenhouse gases.

The Canadian government needs to realize there are some things government must do, and one of them involves getting past denial about its responsibilities to address global warming. Until then AECL will continue to twist in the winds of political change.

Canada’s Agreement with India

Canada nuclear indiaWhile the future of AECL looks bleak, that hasn’t stopped the Harper government from seeking a nuclear energy cooperation agreement with India. On Nov 28 the two countries agreed (Reuters) that Canada would export uranium to India at a rate of about seven million pounds annually and also offer its new ACR1000 reactor to India to meet the energy needs of its rapidly growing economy.

India needs the uranium and reactor technologies because it plans to build 20 GWE of new civilian nuclear reactors to generate electricity by 2030. The Harper government told the Globe & Mail it estimates the value of the agreement to be worth $25-50 billion (cdn) over the next 20 years.

The agreement is also the springboard for a novel idea by energy analyst Ron Banerjee who wrote in the National Post Nov 19 that if you are going to offer AECL to the highest bidder, why stop at exports? His view is that Canada should just sell all of AECL to the Indian government lock, stock, and barrel.

He argues that the combination of a sluggish economy in Ontario and the niche position of CANDU reactor technology, which India has embraced on a significant scale, makes the sale an ideal resolution of AECL’s future. On the other hand, he says, any other reactor firm buying AECL would have less incentive to advance the technology since they already have their own designs.

The rest of the article and the accompanying comments lay out the pros-and-cons for just packing up AECL in a steamer trunk and shipping it to Mumbai on the next cargo vessel outbound through the St. Lawrence Seaway. It is a fascinating article argued in a readable and articulate manner by Banerjee who clearly has done his homework with a well-honed sense of history.

Prior coverage of AECL on this blog

Video – Jeremy Fisher (who looks, and sounds, a bit like an early Bob Dylan)

Tuesday, December 1, 2009

Answering nine nuclear questions

At the EnergyCollective climate analyst Jesse Jenkins asks for dialog

EnergyCollectiveLogo Over at the EnergyCollective (TEC) climate analyst Jesse Jenkins is working on the existential nature of green political correctness v. using nuclear energy to meet baseload demand. In an act akin to nailing a proclamation to the cathedral door, Jenkins asks nine questions and requests that nuclear bloggers, who he also cites in the questions as sources, to answer them.

First of all this is somewhat disingenuous since Jesse's anti-nuclear views are well known from his blog posts and featured participation in TEC webinars. Second, some of us have been down this road before with other anti-nuclear analysts.

For instance, TEC blogger “Big Gav,” who does not post under his real name, practices a “hit-and-run” mode of blogging in which he posts anti-nuclear nonsense and then ignores comments that point out the holes in his arguments.

For nuclear bloggers the question becomes this - are you playing a losing game a 'whack-a-mole' with the latest round of anti-nuclear rhetoric or this is a chance for genuine dialog?

Assuming that Jesse is genuinely interested in a new round of answers, even though all of them have been posted here or on TEC before, I'll offer some brief replies. Jesse's questions are preceded by his initials and my answers are set off in a different font.

JJ What are the biggest three obstacles to the construction and operation of new nuclear power plants in the United States? (If you care to venture a recommendation, in what ways can public policy help mitigate or overcome these barriers)

The big three are cost/financing, manufacturing supply chain, and access to nuclear engineers and skilled trades experienced in proving nuclear quality work. There are some things government must do, and one of them is to accept responsibility for risks that are too great to bear by the private sector, e.g., financing a nuclear power plant. Also, the U.S. needs to train a whole new generation of nuclear engineers and skilled trades who can deliver a nuclear power plant on time and within budget.

JJ New nuclear-fired power plants have been built in the past decade and are operating in Japan, China, South Korea, Taiwan, India and elsewhere. What is the difference between the market or policy environment in these nations and the United States that paves the way for new nuclear plant deployment in these nations while slowing/blocking the industry’s development in the U.S.?

The U.S. is stuck on the idea that nuclear power plants are the responsibility of the private sector whereas in all these other countries, the government is the primary player. Anti-nuclear groups love to sing the "market mantra" because they know few utilities have the market capitalization to bet the company on one. It becomes an effective stopper to new plant development.

JJ The Energy Policy Act of 2005 established new policy support for nuclear power development, including loan guarantees covering up to 80% of eligible project costs for new nuclear projects and several additional incentives for the first six power plants/6 GW of new nuclear plants, including a production tax credit, up to $2 billion in cost-overrun support and guarantees against cost overruns due to delays in the permitting process. These policies have been insufficient to spur the construction of new nuclear power plants in the U.S. Why?

The government has had nearly five years, three energy secretaries, two presidents, and two directors of the DOE loan guarantee program for new nuclear power plants, and has yet to get one of the loan guarantees out the door. That's why.

JJ Nuclear industry advocates have been chiefly focused on securing new loan guarantees, including a push for up to $100 billion in loan guarantees (as in the new Alexander-Webb bill). Why would more loan guarantees succeed where the policies (including loan guarantees) in the Energy Policy Act of 2009 have failed?

It doesn't matter how much you have authorized in loan guarantees. If you don't award any, nothing happens.

JJ Are their specific challenges to the construction of the first few power plants of any particular, and if so, how do these challenges differ from the deployment of these designs at scale?

Yes. First-of-a-kind (FOAK) nuclear power plants inevitably create useful lessons learned that result in costs savings for future plants. That's why Areva's efforts in Finland and France are being closely followed by the rest of the nuclear industry.

JJ Assuming the industry starts growing, what new challenges emerge for nuclear power deployment at large scales (10s of GW per year)?

Getting the power to market via transmission and distribution infrastructure becomes an issue because of NIMBY opposition to power lines. It takes twice as long to get the approvals for the right-of-way as it does to build the lines.

JJ Can new nuclear power plant designs (e.g. small/modular reactors, Gen III+ or Gen IV designs, etc.) mitigate challenges to new nuclear power adoption, and if so, in what specific ways?

Yes, those that use LWR fuel and designs will have a relatively easier time with licensing and their lower price per unit and per KwHr will make them attractive to mid-size utilities that can't afford the 1,000 MW units. All of the nuclear bloggers on TEC have covered the small reactor issues extensively on TEC.

JJ What barriers to nuclear power deployment cannot be solved by policy and why? What factors are most likely to overcome these barriers (or are they intractable)?

Green political correctness run amok, like a recent LA Times editorial, becomes an article of religous faith and no amount of engineering reason or scientific truth will be able to make a dent in it.

Anyway, there you have it. Jesse could also point his browser to the web pages of the Nuclear Energy Institute(NEI), which has a wealth of information to help him answer his questions.

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